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Technology companies are the undisputed kings of cash piling, taking over the top four spots in our fifth annual ranking of the Global Finance Cash 25—the 25 global public companies holding the most in cash and cash equivalents.
Considered geographically, the US sweeps the board, with 14 companies out of 25, four in the top five and seven in the top 10. Far from that score, Japan brings three companies to our top 25.
The top cash hoarders are showing growing numbers for their immediately liquid assets. Fifteen companies show short-term liquidity figures over $20 billion, compared to 14 last year and 15 the previous year. But above all, the cutoff to make our rankings this year was $16.3 billion, up significantly from 2016’s threshold of $13.5 billion or 2015’s $14 billion.
In this year’s ranking, Microsoft keeps the top slot position it won last year, its pockets lined with a staggering $113.2 billion in cash and equivalents, $16.8 billion more than the previous year. And it does so while increasing capital expenditures by more than 40%, to $8.3 billion, and taking its CapEx growth to two-digit figures again after a stall in 2015. A decline in Microsoft’s pile of cash is not to be expected this year; the company’s acquisition of LinkedIn last December will be financed through debt, and Microsoft might want to cling to its most liquid assets to avoid a negative impact on its credit ratings.
Apple climbs from the fifth to the second spot, with cash holdings up $25.6 billion from last year to $67.2 billion—an enormous hoard, although well behind Microsoft’s. Apple’s fast accumulation of cash is all the more remarkable because the company has also been able to sustain some of the highest levels of capital investment in the sector. After an increase of 18%, its CapEx reached an outstanding $13.5 billion. Oracle and Cisco closely follow Apple’s liquidity figures; but they started at already higher numbers, and their CapEx are much more modest.
In fifth place, Toyota Motor of Japan is the top-ranked nontechnology and non-US corporation on this year’s list, while General Electric follows. GE dropped from second to sixth position, with an effective decrease in the amount of cash, cash equivalents and short-term securities of almost a third, although there is some evidence of a recent bounce-back.
Samsung climbs from 12th to eighth, and Amazon from 16th to 10th. But the biggest jump is Abbot Laboratories. The Illinois-based pharmaceutical company more than tripled its cash and equivalents and has appeared from nowhere into 18th position. Honda’s leap is also remarkable: from 32nd last year to 17th this year, with an increase of $3.2 billion in cash on its balance sheet. Intel, on the other hand, fell from ninth to 23rd. Pfizer, after a steep decline last year, shaved another $5.4 billion off its liquidity to fall 11 positions in the ranking.
The US is the uncontested leader in corporate cash hoarding. “The technology sector today holds the most cash among US nonfinancial companies, accounting for 47% of the total, followed by healthcare/pharmaceuticals, consumer products and energy,” according to Richard Lane, senior vice president at Moody’s Analytics. Moody’s estimates the total cash and equivalents (including long-term marketable securities) in the balance sheet of US companies at $1.8 trillion, 9.2% more than the previous year.
The cash pile of nonfinancial companies in Europe, Middle East and Africa grew slightly, to a seven-year peak of €974 billion ($1.1 trillion), according to Moody’s Investors Service. The most cash-rich sectors in these areas are energy, automotive, telecommunications and utilities.
IS THIS THE NEW NORMAL?
Some were expecting the cash-hoarding trend to turn in 2016. Instead, it has intensified. Why do companies keep putting their cash under their mattress, and when can we expect this to change?
Increased geopolitical risks, coupled with memories of the recent recession, are keeping corporate decision-makers cautious. Hopes for growth have been dampened by actual figures, and spare capacity does not encourage new investment. In the US, companies are scaling back hopes for pro-growth policies from the Trump administration, such as corporate tax reform, increased infrastructure spending and regulatory roll-back. Some companies are also preparing for higher interest rates, by either consolidating their ability to pay debts or diminishing their need for future borrowing. Others have taken advantage of their sloshing liquidity for M&A dealmaking, and that is expected to continue in 2017.
Can we expect any changes to these trends in 2017? An S&P May report on corporate cash in the US has brought attention to companies’ increasingly high debt: “Adjusted leverage for both investment-grade and speculative-grade issuers is near decade highs and, conversely, the cash-to-debt ratio near decade lows.” Mark Smith, head of global liquidity in global transaction services at Bank of America-Merrill Lynch, says holding on to cash has allowed companies to build solid credit ratings that they are unwilling to risk. This fact, along with a drop in optimism about the US economy, has led treasurers to postpone investment plans, as shown in the Association for Financial Professionals (AFP) Corporate Cash Indicators Survey for the second quarter of 2017, where the outlook is “continued caution.”
And of course, in the US, there are expectations of a tax holiday for money that companies, particularly tech firms, have booked offshore. According to S&P, US corporate cash has reached an astounding $1.9 trillion, of which S&P estimates that 60% is held overseas; that is $1.1 trillion. Moody’s ups this figure to $1.3 trillion. Some are expecting repatriation to boost investment, wages and growth in the US; but S&P’s report suggests repatriated bounty would go “largely for share repurchases, but also for acquisitions and some debt repayments.” The 2004 repatriation tax holiday had limited impact on the real economy. But with legislative chaos in Washington—witness the GOP’s inability to revise healthcare law—many observers expect tax reform to fail as well.
METHODOLOGY
The Global Finance Cash 25 ranks publicly listed companies by cash, cash equivalents and short-term securities (those maturing between three months and a year) on their balance sheets. Data is gathered from almost 67,000 public companies worldwide. It is a ranking of nonfinancial corporations—we exclude financial insti-tutions from the list. Subsidiaries and nonpublic companies are excluded, and we use a minimum 25% holding for the path from a subject company to its ultimate owner as the cutoff for inclusion.
TOP 25 GLOBAL PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
Total Assets (Latest year available)
1.
MICROSOFT
US
Technology
113,239
193,468
2.
APPLE
US
Technology
67,155
321,686
3.
ORACLE (1)
US
Technology
66,078
134,991
4.
CISCO SYSTEMS
US
Technology
65,756
121,652
5.
TOYOTA MOTOR (2)
Japan
Automotive
48,680
421,092
6.
GENERAL ELECTRIC
US
Industrial
48,129
365,183
7.
JOHNSON & JOHNSON
US
Consumer goods
41,907
141,208
8.
SAMSUNG ELECTRONICS
South Korea
Consumer electronics
29,602
217,086
9.
TOTAL
France
Oil and gas
29,145
230,978
10.
AMAZON
US
Retail
25,981
83,402
11.
GENERAL MOTORS
US
Automotive
24,801
221,690
12.
BP
UK
Oil and gas
23,528
263,316
13.
COCA-COLA
US
Beverages
22,516
87,270
14.
DAIMLER
Germany
Automotive
21,745
256,134
15.
HON HAI PRECISION INDUSTRY
Taiwan
Consumer electronics
20,041
80,257
16.
TAIWAN SEMI-CONDUCTOR
Taiwan
Technology
19,572
58,410
17.
HONDA MOTOR
Japan
Automotive
18,795
169,193
18.
ABBOTT LABORATORIES
US
Pharma
18,775
52,666
19.
QUALCOMM
US
Telecoms
18,648
52,359
20.
VODAFONE
UK
Telecoms
18,623
192,620
21.
SONY
Japan
Consumer electronics
17,953
157,613
22.
PFIZER
US
Pharma
17,850
171,615
23.
INTEL
US
Technology
17,099
113,327
24.
HYUNDAI MOTOR
South Korea
Automotive
16,849
148,080
25.
HEWLETT PACKARD
US
Technology
16,347
79,629
Last available year 2016, except (1) 2017 and (2) 2015. Data valid as of July 28, 2017. All figures in USD millions.
Data for all tables provided by: Orbis by Bureau van Dijk.
North America
Big tech companies keep climbing up the ladder in the North American most-rich companies list. General Electric has gone down from second to fifth, although the latest quarterly figures available in June show a strong recovery of the company’s liquidity, after the efforts made to lose weight and with it the legal “too big to fail” label that restricted part of its activities. Abbott Laboratories makes a huge leap and reaches 10th position, reflecting the sale of its eye-surgery unit, the acquisition of St. Jude Medical and its long-delayed purchase of medical-test maker Alere.
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
MICROSOFT
US
Technology
113,239
2.
APPLE
US
Technology
67,155
3.
ORACLE (1)
US
Technology
66,078
4.
CISCO SYSTEMS
US
Technology
65,756
5.
GENERAL ELECTRIC
US
Industrial
48,129
6.
JOHNSON & JOHNSON
US
Consumer goods
41,907
7.
AMAZON
US
Retail
25,981
8.
GENERAL MOTORS
US
Automotive
24,801
9.
COCA-COLA
US
Beverages
22,516
10.
ABBOTT LABORATORIES
US
Pharma
18,775
11.
QUALCOMM
US
Telecoms
18,648
12.
PFIZER
US
Pharma
17,850
13.
INTEL
US
Technology
17,099
14.
HEWLETT PACKARD
US
Technology
16,347
15.
PEPSICO
US
Beverages
16,125
Last available year 2016, except (1) 2017. Data valid as of July 28, 2017. All figures in USD millions. * Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalents for the prior year
LATIN AMERICA
Latin America’s list is, as usual, somehow skewed by the presence of several tax havens like the Cayman Islands, Bermuda and Curaçao; so some of the most-rich companies domiciled there actually operate somewhere else. That’s the case with the three most cash-rich in our list. Global oilfield services company Schlumberger keeps its first position, despite losing almost $4 billion of its cash pile. Hong Kong–based real estate company Cheung Kong Property Holdings, created in 2015, makes it straight to the second position in our list, pushing Ctrip.com, the Chinese travel services provider, to third place. Genuinely Latin American Embraer, the Brazilian aeronautical firm, takes the fourth spot; while another Hong Kong–based company, cellulose sanitary products manufacturer Hengan International, makes it to fifth position.
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
SCHLUMBERGER
Curaçao
Industrial
9,257
2.
CHEUNG KONG PROPERTY HOLDINGS
Cayman Islands
Real estate
8,073
3.
CTRIP.COM
Cayman Islands
Travel services
4,934
4.
EMBRAER
Brazil
Aerospace
3,018
5.
HENGAN INTERNATIONAL
Cayman Islands
Consumer products
2,142
6.
SINA CORPORATION
Cayman Islands
Media and communications
2,038
7.
FALABELLA
Chile
Retail
1,823
8.
COSAN LIMITED
Bermuda
Food and combustibles
1,777
9.
BROOKFIELD PROPERTY PARTNERS
Bermuda
Real estate
1,769
10.
NEW ORIENTAL EDUCATION.
Cayman Islands
Education
1,734
Last available year 2016. Data valid as of July 28, 2017. All figures in USD millions.
* Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalents for the prior year
WESTERN EUROPE
There’s been a good deal of movement in Western Europe’s list. BP jumps to second position, with $23.5 billion, and joins Total, which with $29.1 billion keeps the top spot for the third year in a row, despite a slight decrease of its cash stash. Daimler follows third with $21.7 billion in its coffers. In addition to BP, there are five other newcomers to the 15 Western European richest: Danone, Peugeot, National Grid, BHP Billiton and Nestle. The biggest falls in the rankings are for Enel and Deutsche Telekom, which have ended 17th and 22nd this year from fourth and fifth last year.
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
TOTAL
France
Oil and gas
29,145
2.
BP
UK
Oil and gas
23,528
3.
DAIMLER
Germany
Automotive
21,745
4.
VODAFONE
UK
Telecoms
18,623
5.
RWE
Germany
Utilities
15,180
6.
DANONE
France
Food products
14,376
7.
MEDTRONIC (1)
Ireland
Medical equipment
13,708
8.
PEUGEOT
France
Automotive
13,639
9.
AIRBUS
Netherlands
Aerospace
12,877
10.
NATIONAL GRID
UK
Utilities
12,303
11.
SIEMENS
Germany
Industrial
11,835
12.
SANOFI
France
Pharma
10,829
13.
BHP BILLITON
UK
Mining
10,319
14.
NOKIA
Finland
Telecoms
9,831
15.
NESTLE
Switzerland
Food products
9,133
Last available year 2016, except (1) 2017. Data valid as of July 28, 2017. All figures in USD millions. * Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalents for the prior year
CENTRAL/EASTERN EUROPE & TURKEY
Russian companies keep losing weight as the most-rich companies in Central and Eastern Europe, although Lukoil, Surgutneftegas and Novatek still monopolize the three top spots. Enka, the Turkish construction company, which disputed this monopoly as second last year, has disappeared from the top 10. But two other Turkish firms appear as newcomers to the list: Alarko, a construction conglomerate, as eighth; and Kardemir, a metals specialist, as ninth.
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
LUKOIL
Russia
Oil and gas
4,309
2.
SURGUTNEFTEGAS
Russia
Oil and gas
1,787
3.
NOVATEK
Russia
Industrial
796
4.
ASSECO POLAND
Poland
Technology
360
5.
POLIMEX - MOSTOSTAL
Poland
Civil engineering
170
6.
BIM BIRLESIK MAGAZALAR
Turkey
Retail
164
7.
CD PROJEKT
Poland
Video gaming
133
8.
ALARKO HOLDING
Turkey
Construction
122
9.
KARDEMIR
Turkey
Metal products
94
10.
TOGLIATTIAZOT
Russia
Chemicals
77
Last available year 2016. Data valid as of July 28, 2017. All figures in USD millions.
* Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalent for the prior year
ASIA-PACIFIC
The Asia-Pacific most-rich companies list shows great stability, with no changes in the names and very few in their positions. There are no changes in the top four spots, and Toyota Motor keeps the first for the third consecutive year with $48.7 billion of cash in its balance sheet, $5.3 billion more than the previous year. The only remarkable change is for Honda, which increased its cash pile by $3.2 billion, climbing from ninth to fifth position.
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
TOYOTA MOTOR (1)
Japan
Automotive
48,680
2.
SAMSUNG ELECTRONICS
South Korea
Consumer Electronics
29,602
3.
HON HAI PRECISION INDUSTRY
Taiwan
Consumer Electronics
20,041
4.
TAIWAN SEMICONDUCTOR
Taiwan
Technology
19,572
5.
HONDA MOTOR
Japan
Automotive
18,795
6.
SONY
Japan
Consumer Electronics
17,953
7.
HYUNDAI MOTOR
South Korea
Automotive
16,849
8.
MITSUBISHI
Japan
Automotive
15,335
9.
GREE ELECTRICAL
China
Consumer products
13,758
10.
MITSUI & CO (1)
Japan
General trade
13,236
Last available year 2016, except (1) 2015. Data valid as of July 28, 2017. All figures in USD millions.
* Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalents for the prior year
MIDDLE EAST
United Arab Emirates real estate developer Aldar Properties appears for the first time in our list and makes it straight to the top slot, with $1.8 billion of cash in its pockets. Last year’s first, Qatar Navigation, falls to second position. Similarly, Israeli Check Point Software moves from second to third. Tasnee, last year’s third, has reduced its cash pile almost 24% and drops to fifth, while Qatar Fuel’s position remains unchanged.
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
ALDAR PROPERTIES
UAE
Real estate
1,823
2.
QATAR NAVIGATION
Qatar
Shipping
1,419
3.
CHECK POINT SOFTWARE
Israel
Technology
1,373
4.
QATAR FUEL
Qatar
Oil and gas
870
5.
TASNEE
Saudi Arabia
Basic materials
775
6.
MOBILE TELE-
COMMUNICATIONS
Kuwait
Telecoms
685
7.
AIR ARABIA
UAE
Airlines
495
8.
BOUBYAN PETROCHEMICAL (1)
Kuwait
Petro-chemicals
465
9.
SAHARA PETROCHEMICAL
Saudi Arabia
Petro-chemicals
461
10.
SAVOLA GROUP
Saudi Arabia
Industrial
355
Last available year 2016, except (1) 2017. Data valid as of July 28, 2017. All figures in USD millions.
* Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalent for the prior year
AFRICA
All 10 most-rich African companies are based in South Africa. Johannesburg’s chemicals company Sasol leads the ranking once again, despite a reduction of $833 million of its cash pile. Naspers, Grindrod and Aspen Pharmacare all climb one position in the ranking; as MTN, the South African mobile phone operator, drops off the list. Two mining companies, Gold Fields and Impala Platinum, make it to the top 10 for the first time and take over the sixth and seventh posts; while the other newcomer, Datatec, a technology solutions-and-services provider, is ninth. n
TOP Regional PUBLIC COMPANIES BY CASH ON BALANCE SHEET
Rank
Company
Country
Industry
Cash* (current)
1.
SASOL LIMITED
South Africa
Chemicals
3,541
2.
NASPERS (1)
South Africa
Media and communications
1,714
3.
GRINDROD
South Africa
Shipping
824
4.
ASPEN PHARMACARE
South Africa
Pharma
738
5.
SAPPI
South Africa
Forest products
703
6.
GOLD FIELDS
South Africa
Mining
527
7.
IMPALA PLATINUM
South Africa
Mining
459
8.
SHOPRITE
South Africa
Retail
459
9.
DATATEC LIMITED (1)
South Africa
Technology
413
10.
WILSON BAYLY HOLMES - OVCON
South Africa
Construc-tion
391
Last available year 2016, except (1) 2015. Data valid as of July 28, 2017. All figures in USD millions.
* Includes cash & cash equivalents for the most recent year available
^ Includes cash & cash equivalents for the prior year